According to Apple: http://www.apple.com/iphone/buy: “Requires new two-year AT&T wireless service contract, sold separately to qualified customers; credit check required; must be 18 or older. Existing AT&T customers who want to upgrade from another phone or replace an iPhone 3G should check with AT&T or use http://www.apple.com/iphone/buy to find out if they are eligible for early upgrade pricing: $299 (8GB), $399 (16GB), or $499 (32GB) with a new two-year contract. For those who are not eligible for an early upgrade or who wish to buy iPhone as a gift, the prices are $499 (8GB), $599 (16GB), or $699 (32GB).